Education Policy Reform and the Return to Schooling from Instrumental Variables

Kevin Denny and Colm Harmon

No 2518, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper exploits an unusual policy reform that had the effect of reducing the direct cost of schooling in Ireland in the late 1960?s. This gave rise to an increased level of schooling but with effects that vary substantially across family background. This interaction of educational reform and family background generates a set of instrumental variables that are used to estimate the return to schooling allowing for the endogeneity of schooling. Using a standard Mincer type model we find a large and well-determined rate of return of around 12% which is substantially higher than the OLS estimates of around 7%.

Keywords: Education; Earnings; Instrumental variables; Ireland (search for similar items in EconPapers)
JEL-codes: C31 J24 J31 (search for similar items in EconPapers)
Date: 2000-07
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Citations: View citations in EconPapers (27)

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Related works:
Working Paper: Education Policy Reform and the Return to Schooling from Instrumental Variabes (2000)
Working Paper: Education Policy Reform and the Return to Schooling from Instrumental Variables (2000)
Working Paper: Education policy reform and the return to schooling from instrumental variables (2000)
Working Paper: Education policy reform and the return to schooling from instrumental variables (2000)
Working Paper: Education policy reform and the return to schooling from instrumental variables (2000)
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